This Week in Barrons – 3-28-10:
Our Thoughts:
"We can't expect the American People to jump from Capitalism to Communism, but we can assist their elected leaders in giving them small doses of Socialism, until they awaken one day to find that they have Communism." … Nikita Khrushchev
It only seems fitting that this week we pushed Obama-care on the American people who soundly rejected it.
A question came in from a reader: “When do you think the Fed will STOP supporting the market. Couldn’t they keep supporting it for the next several years until the economy truly picks-up?”
Great question. In my view - the market is trying to take the most money from the most people at any one time. So, with that in mind, the market will usually move in the opposite direction of the bulk of the people. In fact on CNBC on Thursday an NYSE floor-person said: "When the public finally comes in, that's exactly when you should be selling because they always come in at the top. The public normally buys at the very top and sells at the very bottom."
Now the Fed and Government want the market up to give the illusion that the economy is working and things are getting better. Wall Street wants the market up so that it pulls in money that’s on the sidelines and what is currently in Treasuries. The U.S. would also like the market up so that people don't launch even more "tea parties" and demonstrations concerning the way American has been squandered. However, once the entire agenda is in place – both elements are prepared to ‘pull the plug’ because laws will be in place that will make people even more dependant upon the Government’s programs – and playing a ‘short market’ is meant for the pros rather than the amateurs.
The market is being propped up in order to inspire confidence and keep the population from popular revolt while they jam spending, healthcare, bail-outs, etc down our throats. But, there comes a point in every market rally, when the collective "risk aversion" of so many people, stops them from participating in any more buying. Then, there comes another moment when they decide that they should "sell" before the market rolls over and takes their money. Can Wall Street and Uncle Sam, hold off the forces of millions of people trying to take money "out" versus putting it in? Currently money has been coming out of the market, volumes are incredibly low, gains are painfully slow and always on the heels of futures buying via the Fed. I believe the coming market fall could be very interesting, and you could see a massively fast and brutal plunge.
However, do we know WHEN it's not in their interest to continue to keep the market up – NO! When you have ‘floor traders’ saying that the “market isn’t free” – it’s at that point that technicals, VIX readings, moving averages, earnings, foreclosures, and bankruptcies – they all don’t matter any longer. The market has been burning a huge amount of short sellers and put buyers for the better part of several months now; however, the participation rates are low, funds are running on air - having expended their cash, and we are seeing the world back away from American financial assets. If we make it past 11,150, then all bets are off – but I’m still looking for one last feeding frenzy that pushes us up and over 11,000 or so, before the wheels came off.
The Market:
President Obama's fiscal 2011 budget will generate nearly $10 trillion in cumulative budget deficits over the next 10 years, $1.2 trillion more than the administration projected, and raise the federal debt to 90 percent of the nation's economic output by 2020, the Congressional Budget Office reported Thursday.
Did you know there's never been a successful economy on earth with debt levels like this? The market itself has been climbing a wall of worry, spurred on by Fed money – and I tend to think we're near the end of it. Monday the market came back a bit, but was very sluggish and actually red during the day. Tuesday was sluggish. Wednesday just barely got us out of red and into green, same with Thursday. Friday we were up 65 and want all the way down to red on news of a possible North Korea sinking of a South Korean vessel.
This market has ignored: Greece, Italy, Ireland, Latvia, Dubai, earthquakes, foreclosures, bank failures, and healthcare. In short, the market has really started to get choppy – up 117 at noon and closing up 5 – which usually spells a change in the wind and – we could be AT or just a couple of weeks away from the ultimate high. We are still leaning long, but taking profits quickly. At some point we'll list all the shorts, puts and ETF's we'll be using to make a fortune when the market falls.
My guess is that we come into this week and see one last concerted push higher. We have a Holiday week ahead of us, which usually means lower than normal volumes, and low volumes mean easy manipulation. But next week we have the “Non-Farm Payroll Report” – simply termed “The Jobs Report” - that is due out on Friday. So, if it's poor, we potentially come into Monday April 5, looking at a rapidly weakening market. And, if it's strong because of the 160K census workers the government hired, then Monday April 5th could potentially be a big up day, which potentially spells the end. In either event, I think that between today and say April 7th, 8th or 9th we will experience the "top" of the long run since last March. I know that's a bold statement, and I could end up eating crow – but that’s my thinking as of now.
Tips:
We’re left only holding JCI and NETL on the long side. We have JCI at 32.79 with a hard stop at 32.90, and NETL at 30.00 with a hard stop at 29.74. I’m not going to hold JCI into a losing position. GLW almost broke 20, but backed away – because I was gun shy about holding it over the weekend.
If you’d like to view my actual stock trades - feel free to sign up as a twitter follower – “taylorpamm” is my nickname on Twitter – fyi.
Until next week – be safe.
R.F. Culbertson
rfc@getabby.com
http://rfcfinancialnews.blogspot.com
Saturday, March 27, 2010
Sunday, March 21, 2010
This week in Barrons -3-21-10
This Week in Barrons – 3-21-10:
Our Thoughts:
According to a new report, ninety percent of all paper money in this country has traces of cocaine. Talk about your stimulus money! On the bright side, at least U.S. currency is worth something again.
I am currently travelling – therefore this Barrons will be shorter than most – thanks for understanding.
Do we all remember the gent who strapped some explosives into his underwear and made a feeble attempt to blow up an airplane. Did we forget that (a) he had an "accomplice" that helped him get on the plane, and (b) he had no passport but managed to get on this international flight? Can’t we fix the process before jumping into buying more ‘stuff’?
On Monday we got the "Dodd" bill concerning financial market regulations. In the bill there is: (a) no mention of the ratings agencies that gave those toxic assets a AAA rating, (b) the Fed gets even more power to oversee itself, (c ) no mention of the SEC who repeatedly ignored 4 different warnings about Bernie Madoff, (d) nothing about Goldman, Citi or J.P. Morgan OR ‘Too Big to Fail’, (e) but it does put tighter regulations on the small town regional banks – what problem are we solving again?
Toyota launched a big PR campaign to reassure customers that they’re standing beside their vehicles... because that's the only safe place to stand.
And then there is China. For some reason people still think we have some form of power over China. In fact one CNBC talking-head suggested we should "exert our influence" on them. What influence? China owns more dollars than we do, and they don't carry any debt on them. The Chinese military is nuclear and is bigger than our own. China is our biggest creditor, and if China were to halt exports to the US, Wal-Mart would have 4 items left to sell. We bought their products because we don't have our own. China bought our Treasuries because it was nothing more than a "loan" that allowed Americans to buy more Chinese stuff. We received stuff, and China received a trillion dollars of reserves and became the manufacturing capital of the world.
Moving to the market:
Monday was a picture perfect day of just how manipulated the market has become, and how complacent people have become about it. We opened flat, and stayed down about 30 DOW points until we heard Dodd's speech about his regulation bill, and then we magically turned green. Tuesday we found out from Ben Bernanke that “low rates will be sustained for the foreseeable future.” Larry Levin (on the Chicago trading floor) summed up what’s really happening to a CNBC reporter: “Yes, the market is being supported by the Government and each time something bad hits, whether it's Greece or what have you, they come in and support the market. Whether you like it or not, until that stops this market goes up.” That is how we get to 52 week highs while:
- the Empire state manufacturing index fell
- housing permits fell
- housing sales fell
- and additional banks were closed (making 30 this year)
Remember Ben Bernanke’s statement in March, 2009 - "Consumer confidence will increase with the gradual rise of equities" – do you think he saw this coming?
The latest Toyota Prius bumper sticker reads: "I'd like to brake for animals, I just can't."
I am in danger of having one of my predictions go south. I said that we’d see the market try and take out the recent highs, but probably come up short. Well, this week they pushed through the old DOW highs. If they take us to DOW 11,500 or more I'll be really wrong, and all we can do is ponder when this all does collapse. But for right now, I am going to continue to stand firm – and think that we are in the last days of the big run up, and we are in a mild form of "blow off top" right now.
It will be easy to see over this coming week if I'm right or wrong. If we are up and over 11K and still going, I am wrong. But if we gain a bit more and then see drop outs, my old prediction will have been correct. Yes we're at new highs, yet the volume stinks. This is a Fed driven move, and it's going to be interesting to see if they can sustain it.
TIPS:
The Senate voted against a plan to send a $250 check to 57 million elderly people. In the end, senators decided NOT to give the elderly money, because you know, they're just going to spend it on drugs.
I kept my stops fairly tight during the week – and on Friday was stopped out of all the short term holds that we had put out there. It’s truly not my style to day or ‘weekly’ trade stocks – but rather I prefer longer-term positions. Unfortunately you can’t fight the tape – so you take what the market will give you. Having said that … my stops are there only for ‘downward’ actions. That is to say: if I purchase XYZ at $20 and my opening stop would potentially be $19.50’ish – but once it started moving upward to say $21.00 – I’d adjust my stop to say $20.50 – strictly using the ‘tight stop’ to prevent us from losing our gains.
If you’d like to view my actual stock trades - feel free to sign up as a twitter follower – “taylorpamm” is my nickname on Twitter – fyi.
Until next week – be safe.
R.F. Culbertson
rfc@getabby.com
Our Thoughts:
According to a new report, ninety percent of all paper money in this country has traces of cocaine. Talk about your stimulus money! On the bright side, at least U.S. currency is worth something again.
I am currently travelling – therefore this Barrons will be shorter than most – thanks for understanding.
Do we all remember the gent who strapped some explosives into his underwear and made a feeble attempt to blow up an airplane. Did we forget that (a) he had an "accomplice" that helped him get on the plane, and (b) he had no passport but managed to get on this international flight? Can’t we fix the process before jumping into buying more ‘stuff’?
On Monday we got the "Dodd" bill concerning financial market regulations. In the bill there is: (a) no mention of the ratings agencies that gave those toxic assets a AAA rating, (b) the Fed gets even more power to oversee itself, (c ) no mention of the SEC who repeatedly ignored 4 different warnings about Bernie Madoff, (d) nothing about Goldman, Citi or J.P. Morgan OR ‘Too Big to Fail’, (e) but it does put tighter regulations on the small town regional banks – what problem are we solving again?
Toyota launched a big PR campaign to reassure customers that they’re standing beside their vehicles... because that's the only safe place to stand.
And then there is China. For some reason people still think we have some form of power over China. In fact one CNBC talking-head suggested we should "exert our influence" on them. What influence? China owns more dollars than we do, and they don't carry any debt on them. The Chinese military is nuclear and is bigger than our own. China is our biggest creditor, and if China were to halt exports to the US, Wal-Mart would have 4 items left to sell. We bought their products because we don't have our own. China bought our Treasuries because it was nothing more than a "loan" that allowed Americans to buy more Chinese stuff. We received stuff, and China received a trillion dollars of reserves and became the manufacturing capital of the world.
Moving to the market:
Monday was a picture perfect day of just how manipulated the market has become, and how complacent people have become about it. We opened flat, and stayed down about 30 DOW points until we heard Dodd's speech about his regulation bill, and then we magically turned green. Tuesday we found out from Ben Bernanke that “low rates will be sustained for the foreseeable future.” Larry Levin (on the Chicago trading floor) summed up what’s really happening to a CNBC reporter: “Yes, the market is being supported by the Government and each time something bad hits, whether it's Greece or what have you, they come in and support the market. Whether you like it or not, until that stops this market goes up.” That is how we get to 52 week highs while:
- the Empire state manufacturing index fell
- housing permits fell
- housing sales fell
- and additional banks were closed (making 30 this year)
Remember Ben Bernanke’s statement in March, 2009 - "Consumer confidence will increase with the gradual rise of equities" – do you think he saw this coming?
The latest Toyota Prius bumper sticker reads: "I'd like to brake for animals, I just can't."
I am in danger of having one of my predictions go south. I said that we’d see the market try and take out the recent highs, but probably come up short. Well, this week they pushed through the old DOW highs. If they take us to DOW 11,500 or more I'll be really wrong, and all we can do is ponder when this all does collapse. But for right now, I am going to continue to stand firm – and think that we are in the last days of the big run up, and we are in a mild form of "blow off top" right now.
It will be easy to see over this coming week if I'm right or wrong. If we are up and over 11K and still going, I am wrong. But if we gain a bit more and then see drop outs, my old prediction will have been correct. Yes we're at new highs, yet the volume stinks. This is a Fed driven move, and it's going to be interesting to see if they can sustain it.
TIPS:
The Senate voted against a plan to send a $250 check to 57 million elderly people. In the end, senators decided NOT to give the elderly money, because you know, they're just going to spend it on drugs.
I kept my stops fairly tight during the week – and on Friday was stopped out of all the short term holds that we had put out there. It’s truly not my style to day or ‘weekly’ trade stocks – but rather I prefer longer-term positions. Unfortunately you can’t fight the tape – so you take what the market will give you. Having said that … my stops are there only for ‘downward’ actions. That is to say: if I purchase XYZ at $20 and my opening stop would potentially be $19.50’ish – but once it started moving upward to say $21.00 – I’d adjust my stop to say $20.50 – strictly using the ‘tight stop’ to prevent us from losing our gains.
If you’d like to view my actual stock trades - feel free to sign up as a twitter follower – “taylorpamm” is my nickname on Twitter – fyi.
Until next week – be safe.
R.F. Culbertson
rfc@getabby.com
Saturday, March 13, 2010
This week in Barrons - 3-14-2010
This Week in Barrons – 3-14-10:
Our Thoughts:
Age is strictly a case of mind over matter. If you don't mind, it doesn't matter … Jack Benny
From a paper called: “Gold and Economic Freedom": “In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. Under a gold standard, the amount of credit that an economy can support is determined by the economy's tangible assets, since every credit instrument is ultimately a claim on some tangible asset. Therefore, gold and economic freedom are inseparable. -Alan Greenspan.
- Last month the government ran up the largest monthly deficit in history totaling $220.9 billion, 14 percent higher than the previous record set in February of last year.
- The Obama administration is projecting that the deficit for the 2010 budget year will hit an all-time high of $1.56 trillion, surpassing last year's $1.4 trillion total.
- The Obama administration is forecasting that the deficit will remain above $1 trillion in 2011, giving the country 3 straight years of $1 trillion-plus deficits.
Now isn't that interesting? Alan Greenspan said that without gold you can't be economically free, AND that asset determines the amount of credit a country can support. So we have NO gold standard, and we’re running the biggest deficits in the HISTORY of our nation – even Alan Greenspan realized that this would end badly. Our nation is bankrupt – our banks keep two sets of books – our infrastructure is crumbling – our people are either under-employed and/or un-employed – our states can’t make budget – our deficits are in the trillions, not to mention the $80 trillion that we are going to owe for all of our programs – What on Earth do we do about it?
I don't deserve this award, but I have arthritis and I don't deserve that either … Jack Benny
Well – we can appoint Ms. Janet Yellen as Fed Co-Chair because she believes in “keeping the monetary presses running and dealing with the inflation later". If someone could logically explain to me how we get out of the multitude of messes we are in, I'd gladly sell my gold and silver and go on with life a happy camper. Now – having said that – Jim Taylor wrote me with a fascinating paper which I’d like to take the time to share next week – thanks Jim!
The Market:
The more people I meet – the more people are trying to get OUT of this market at these levels than get IN. Did you know:
- 7,000 Baby Boomers are day are retiring – and for the next 15 years that number is going increase, as the biggest wave of our money making population goes from their earning days to their sustaining days.
- Which means – not only have the baby boomers been responsible for all the economic and financial gains we've seen over the last 20 years, BUT more of them are going to need to take money OUT of the market versus putting money IN.
- 51% of the Baby Boomers are not prepared retire – and have less than $50,000 in savings
If you add up the ponzi scheme economy, with the demographics, you come away with something a whole lot less rosy than Wall Street is telling you. It’s true that in the short term, they can use the President’s Working Group to manipulate the market, and they can also use mark to model instead of mark to market.
BUT what about this news blurb: “07:48 AM The White House turns to short sales to help stem the foreclosure crisis, allowing delinquent borrowers to sell their homes for less than the amount owed and forcing banks to forgive the difference. To speed the process, the government will hand out cash to both mortgage servicers and homeowners.” Just so I clear on this – a zillion people got conned into the idea that houses only go up, so they decided to "get in" while they could. During 2004 to 2006 people 4 to 5 TIMES what a house was worth – and started the greatest real-estate orgy of all time. Most couldn't afford it, but figured "Hey it only goes up, so what's the risk?" Let me suggest – IF you were smart enough to hunt down an outfit that would allow you to buy a home you could not afford, and smart enough to know how to lie on the application – you were probably smart enough to know that your rate would reset higher and you were NOT going to able to AFFORD IT when that happened. Notice the words “Forcing banks to forgive the difference". As the banks go ahead and “forgive billions” between what the house is now worth and what they paid, doesn't that mean billions just "vanish?" And doesn’t that mean that more banks will declare ‘bankruptcy’? And isn't the FDIC basically bankrupt? So, who's going to make up the difference? Oh, that would be you and me...again.
It's not so much knowing when to speak, but rather knowing when to pause … Jack Benny
With all that in mind, the only question is: How far can it go before the wheels fall off? We know their intent is to keep pushing so much stimulus that the people get a false sense of security and actually re-elect Congress in November. I said quite a while back that the market would run up and try and challenge the old highs at 10723, but would probably fall short, stalling out at the 10600 level. Well, we’re here and are we building a new base to push up through the old high and run to 11,500? I still don't think so. We could push thru the old highs – people rush in – and then we sell and the late-comers get crushed.
Honestly – the mutual funds don’t have enough money to keep buying. The public isn’t jumping in to buy the market. Which just leaves Bernanke and his henchmen – and I’m not sure that there’s that much left?
We have been leaning long the market, but at some point in the not too distant future, we'll be buying puts and shorting stocks. But until we roll over and it's proven to me the bear market bounce has ended, we'll be leaning long but keeping our finger near the sell button.
I’m still holding:
CLF at 61.77 - hard stop at 62.50
NTRI at 16.47 - hard stop at 17.00
VDSI at 8.51 - hard stop at 8.60
FSYS at 30.09 – hard stop at 32.00
DRIV at 28.17 – hard stop at 28.65
SPY at 109.55 – hard stop at 114.29
If you’d like to view my actual stock trades - feel free to sign up as a twitter follower – “taylorpamm” is my nickname on Twitter – fyi.
Remember the Blog http://rfcfinancialnews.blogspot.com/
Until next week – be safe.
R.F. Culbertson
rfc@getabby.com
Our Thoughts:
Age is strictly a case of mind over matter. If you don't mind, it doesn't matter … Jack Benny
From a paper called: “Gold and Economic Freedom": “In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. Under a gold standard, the amount of credit that an economy can support is determined by the economy's tangible assets, since every credit instrument is ultimately a claim on some tangible asset. Therefore, gold and economic freedom are inseparable. -Alan Greenspan.
- Last month the government ran up the largest monthly deficit in history totaling $220.9 billion, 14 percent higher than the previous record set in February of last year.
- The Obama administration is projecting that the deficit for the 2010 budget year will hit an all-time high of $1.56 trillion, surpassing last year's $1.4 trillion total.
- The Obama administration is forecasting that the deficit will remain above $1 trillion in 2011, giving the country 3 straight years of $1 trillion-plus deficits.
Now isn't that interesting? Alan Greenspan said that without gold you can't be economically free, AND that asset determines the amount of credit a country can support. So we have NO gold standard, and we’re running the biggest deficits in the HISTORY of our nation – even Alan Greenspan realized that this would end badly. Our nation is bankrupt – our banks keep two sets of books – our infrastructure is crumbling – our people are either under-employed and/or un-employed – our states can’t make budget – our deficits are in the trillions, not to mention the $80 trillion that we are going to owe for all of our programs – What on Earth do we do about it?
I don't deserve this award, but I have arthritis and I don't deserve that either … Jack Benny
Well – we can appoint Ms. Janet Yellen as Fed Co-Chair because she believes in “keeping the monetary presses running and dealing with the inflation later". If someone could logically explain to me how we get out of the multitude of messes we are in, I'd gladly sell my gold and silver and go on with life a happy camper. Now – having said that – Jim Taylor wrote me with a fascinating paper which I’d like to take the time to share next week – thanks Jim!
The Market:
The more people I meet – the more people are trying to get OUT of this market at these levels than get IN. Did you know:
- 7,000 Baby Boomers are day are retiring – and for the next 15 years that number is going increase, as the biggest wave of our money making population goes from their earning days to their sustaining days.
- Which means – not only have the baby boomers been responsible for all the economic and financial gains we've seen over the last 20 years, BUT more of them are going to need to take money OUT of the market versus putting money IN.
- 51% of the Baby Boomers are not prepared retire – and have less than $50,000 in savings
If you add up the ponzi scheme economy, with the demographics, you come away with something a whole lot less rosy than Wall Street is telling you. It’s true that in the short term, they can use the President’s Working Group to manipulate the market, and they can also use mark to model instead of mark to market.
BUT what about this news blurb: “07:48 AM The White House turns to short sales to help stem the foreclosure crisis, allowing delinquent borrowers to sell their homes for less than the amount owed and forcing banks to forgive the difference. To speed the process, the government will hand out cash to both mortgage servicers and homeowners.” Just so I clear on this – a zillion people got conned into the idea that houses only go up, so they decided to "get in" while they could. During 2004 to 2006 people 4 to 5 TIMES what a house was worth – and started the greatest real-estate orgy of all time. Most couldn't afford it, but figured "Hey it only goes up, so what's the risk?" Let me suggest – IF you were smart enough to hunt down an outfit that would allow you to buy a home you could not afford, and smart enough to know how to lie on the application – you were probably smart enough to know that your rate would reset higher and you were NOT going to able to AFFORD IT when that happened. Notice the words “Forcing banks to forgive the difference". As the banks go ahead and “forgive billions” between what the house is now worth and what they paid, doesn't that mean billions just "vanish?" And doesn’t that mean that more banks will declare ‘bankruptcy’? And isn't the FDIC basically bankrupt? So, who's going to make up the difference? Oh, that would be you and me...again.
It's not so much knowing when to speak, but rather knowing when to pause … Jack Benny
With all that in mind, the only question is: How far can it go before the wheels fall off? We know their intent is to keep pushing so much stimulus that the people get a false sense of security and actually re-elect Congress in November. I said quite a while back that the market would run up and try and challenge the old highs at 10723, but would probably fall short, stalling out at the 10600 level. Well, we’re here and are we building a new base to push up through the old high and run to 11,500? I still don't think so. We could push thru the old highs – people rush in – and then we sell and the late-comers get crushed.
Honestly – the mutual funds don’t have enough money to keep buying. The public isn’t jumping in to buy the market. Which just leaves Bernanke and his henchmen – and I’m not sure that there’s that much left?
We have been leaning long the market, but at some point in the not too distant future, we'll be buying puts and shorting stocks. But until we roll over and it's proven to me the bear market bounce has ended, we'll be leaning long but keeping our finger near the sell button.
I’m still holding:
CLF at 61.77 - hard stop at 62.50
NTRI at 16.47 - hard stop at 17.00
VDSI at 8.51 - hard stop at 8.60
FSYS at 30.09 – hard stop at 32.00
DRIV at 28.17 – hard stop at 28.65
SPY at 109.55 – hard stop at 114.29
If you’d like to view my actual stock trades - feel free to sign up as a twitter follower – “taylorpamm” is my nickname on Twitter – fyi.
Remember the Blog http://rfcfinancialnews.blogspot.com/
Until next week – be safe.
R.F. Culbertson
rfc@getabby.com
Saturday, March 6, 2010
This week in Barrons - 3-7-10
This Week in Barrons – 3-7-10:
Our Thoughts:
A man's only as old as the woman he feels … Groucho Marx
A Stroll Down Bizarro Lane
On Friday:
- Did we really just lose another 36k people from the payrolls last month? What the Initial Jobless Report failed to mention was that the enrollment in the "special emergency" programs that extend benefits rose by over 240,000. Where are those rose colored glasses when I need them?
- WASHINGTON - A new congressional report released Friday says the United States' long-term fiscal woes are even worse than predicted by President Barack Obama's grim budget submission last month. The nonpartisan Congressional Budget Office predicts that Obama's budget plans would generate deficits over the upcoming decade that would total $9.8 trillion. That's $1.2 trillion more than predicted by the administration. The agency says its future-year predictions of tax revenues are more pessimistic than the administration's.
- We ended the session with the DOW up 122 points and crossing over the 10,500 line, but once again we have this announce called reality:
- CHARLOTTE, N.C. (AP) -- Regulators on Friday shut banks in Florida, Illinois, Maryland and Utah, boosting to 26 the number of bank failures in the U.S. so far this year following the 140 brought down in 2009 by mounting loan defaults and the recession.
Alimony is like buying hay for a dead horse … Groucho Marx
As I was driving to Chicago to see my son at Northwestern Univ a little while ago – I couldn’t help but notice warehouse after empty warehouse, all of them with "For Sale" signs on them. Hotels with graffiti’d walls – potentially 250 rooms – no windows, no beds – it reminded me of pictures of burned out buildings in Berlin in WWII.
Behind every successful man is a woman, behind her is his wife … Groucho Marx
On Friday:
- New Jersey Transit Plans 25% Fare Increase to Cope With Expanding Deficit
- Oil rises to near $81
- Unemployment Rate Including Discouraged Workers Rose To 16.8%
- Wall Street Journal - Employment of Adult Males at Record Low
- On CNBC - Someone came on and said: “Hey, somebody's going to bail Greece out, it's no big deal". No big deal – a monetary union made up of different cultures, most of them broke and making believe they can just move forward like nothing's wrong – it’s a BIG DEAL!
I ran across someone who just purchased a $50,000 automobile – and I asked how he was going to pay for that – what I heard back was interesting – “I stopped paying my mortgage about a year ago. The house is worth half of what I paid for it, so I told the bank you keep it - but I'll stay here and maintain it for you until you kick me out. That was 14 months ago and I haven't heard a word. So, instead of paying $1,500 a month on my house, I pay $700 a month for my car."
Getting older is no problem. You just have to live long enough … Groucho Marx
There is no question we are deep into a deleveraging situation, a credit crunch, an impending commercial real estate crash, and much more. Looking at global stock market patterns, and the debt to GDP ratios in foreign lands, this isn't going to be a "US only" disaster. I tend to think we'll be living through a synchronized global melt down in the next 1 - 3 years time. China is still putting up Cities that house a million people, but no one lives there. Japan is in a slowdown. Europe is trying to get Germany to pay for everything and they aren't willing to, and Sovereign debt is the next international shoe to drop.
Have faith in Gold, Silver and related "shares". Only Gold and silver have the ability to withstand such monetary disasters.
The Market:
The DOW hit 10,566 – good work – so what’s next? A month of so ago I suggested that the market would make a mad dash higher, but it would come up short of the 10,723 high and then roll over. Is it possible we just punch through and make all new highs here? Sure it's possible, this market is getting juiced by Uncle Sam on a daily basis – who has deep and unlimited pockets.
I don't care to belong to a club that accepts people like me as members … Groucho Marx
But we're going to remain stubborn and suggest that even if/when we hit the highs, we struggle there, and pull down. Even if we exceeded the high by a hundred points or so, I'd be hard pressed to think it could hold up there. We know employment is rotten, we know banks are insolvent, we know that without Uncle Sam spending $24 Trillion, we'd be mired in the grand depression right now. The illusion of recovery is just that, an illusion. If we do take out the highs and just roll on up to 11K, I won't be surprised. I will just have under estimated the amount of money they are willing to spend to make it happen. In other words, as the world’s investors continue to pull money OUT of the markets, "someone" is making up the difference – and that someone is Uncle Sam. As Larry Levine said from the Chicago trading floor, "for 9 months all the market gains came in the overnight session". Consider that for a minute. You buy XYZ at 25.00 at noon. But by 4 pm it's at 24.60, so you sell it. The next day it opens at 25.75. There's the gain – in after hours – and who’s playing there – institutions and Uncle Sam. I have to figure that we might be looking at a shorting opportunity soon.
In the mean time we've been long several positions and they've done very well for us:
In the mean time, "lean long, but keep your finger near the sell button".
In the very near future – I’m going to start making my stock moves public under Twitter – so feel free to sign up as a twitter follower – “taylorpamm” is my nickname on Twitter – fyi.
Until next week – be safe.
R.F. Culbertson
rfc@getabby.com
Our Thoughts:
A man's only as old as the woman he feels … Groucho Marx
A Stroll Down Bizarro Lane
On Friday:
- Did we really just lose another 36k people from the payrolls last month? What the Initial Jobless Report failed to mention was that the enrollment in the "special emergency" programs that extend benefits rose by over 240,000. Where are those rose colored glasses when I need them?
- WASHINGTON - A new congressional report released Friday says the United States' long-term fiscal woes are even worse than predicted by President Barack Obama's grim budget submission last month. The nonpartisan Congressional Budget Office predicts that Obama's budget plans would generate deficits over the upcoming decade that would total $9.8 trillion. That's $1.2 trillion more than predicted by the administration. The agency says its future-year predictions of tax revenues are more pessimistic than the administration's.
- We ended the session with the DOW up 122 points and crossing over the 10,500 line, but once again we have this announce called reality:
- CHARLOTTE, N.C. (AP) -- Regulators on Friday shut banks in Florida, Illinois, Maryland and Utah, boosting to 26 the number of bank failures in the U.S. so far this year following the 140 brought down in 2009 by mounting loan defaults and the recession.
Alimony is like buying hay for a dead horse … Groucho Marx
As I was driving to Chicago to see my son at Northwestern Univ a little while ago – I couldn’t help but notice warehouse after empty warehouse, all of them with "For Sale" signs on them. Hotels with graffiti’d walls – potentially 250 rooms – no windows, no beds – it reminded me of pictures of burned out buildings in Berlin in WWII.
Behind every successful man is a woman, behind her is his wife … Groucho Marx
On Friday:
- New Jersey Transit Plans 25% Fare Increase to Cope With Expanding Deficit
- Oil rises to near $81
- Unemployment Rate Including Discouraged Workers Rose To 16.8%
- Wall Street Journal - Employment of Adult Males at Record Low
- On CNBC - Someone came on and said: “Hey, somebody's going to bail Greece out, it's no big deal". No big deal – a monetary union made up of different cultures, most of them broke and making believe they can just move forward like nothing's wrong – it’s a BIG DEAL!
I ran across someone who just purchased a $50,000 automobile – and I asked how he was going to pay for that – what I heard back was interesting – “I stopped paying my mortgage about a year ago. The house is worth half of what I paid for it, so I told the bank you keep it - but I'll stay here and maintain it for you until you kick me out. That was 14 months ago and I haven't heard a word. So, instead of paying $1,500 a month on my house, I pay $700 a month for my car."
Getting older is no problem. You just have to live long enough … Groucho Marx
There is no question we are deep into a deleveraging situation, a credit crunch, an impending commercial real estate crash, and much more. Looking at global stock market patterns, and the debt to GDP ratios in foreign lands, this isn't going to be a "US only" disaster. I tend to think we'll be living through a synchronized global melt down in the next 1 - 3 years time. China is still putting up Cities that house a million people, but no one lives there. Japan is in a slowdown. Europe is trying to get Germany to pay for everything and they aren't willing to, and Sovereign debt is the next international shoe to drop.
Have faith in Gold, Silver and related "shares". Only Gold and silver have the ability to withstand such monetary disasters.
The Market:
The DOW hit 10,566 – good work – so what’s next? A month of so ago I suggested that the market would make a mad dash higher, but it would come up short of the 10,723 high and then roll over. Is it possible we just punch through and make all new highs here? Sure it's possible, this market is getting juiced by Uncle Sam on a daily basis – who has deep and unlimited pockets.
I don't care to belong to a club that accepts people like me as members … Groucho Marx
But we're going to remain stubborn and suggest that even if/when we hit the highs, we struggle there, and pull down. Even if we exceeded the high by a hundred points or so, I'd be hard pressed to think it could hold up there. We know employment is rotten, we know banks are insolvent, we know that without Uncle Sam spending $24 Trillion, we'd be mired in the grand depression right now. The illusion of recovery is just that, an illusion. If we do take out the highs and just roll on up to 11K, I won't be surprised. I will just have under estimated the amount of money they are willing to spend to make it happen. In other words, as the world’s investors continue to pull money OUT of the markets, "someone" is making up the difference – and that someone is Uncle Sam. As Larry Levine said from the Chicago trading floor, "for 9 months all the market gains came in the overnight session". Consider that for a minute. You buy XYZ at 25.00 at noon. But by 4 pm it's at 24.60, so you sell it. The next day it opens at 25.75. There's the gain – in after hours – and who’s playing there – institutions and Uncle Sam. I have to figure that we might be looking at a shorting opportunity soon.
In the mean time we've been long several positions and they've done very well for us:
- AAPL at 215.56 - hard stop at 216.50
- DIA at 105.11 - hard Stop at 105..15
- FCX at 77.11 - hard stop at 78.89
- SPY at 109.55 - hard stop at 112.98
- CLNE at 18.33 - hard stop 18.60
In the mean time, "lean long, but keep your finger near the sell button".
In the very near future – I’m going to start making my stock moves public under Twitter – so feel free to sign up as a twitter follower – “taylorpamm” is my nickname on Twitter – fyi.
Until next week – be safe.
R.F. Culbertson
rfc@getabby.com
Sunday, February 28, 2010
This week in Barrons - 2-28-10
This Week in Barrons – 2-28-10:
Our Thoughts:
I lost my job. No, I didn't really lose my job. I know where my job is. It's just, when I go there, there's this new guy doing it … Bobcat Goldthwait
Let's Just Suppose...
Indulge me here for a moment. What if: What if the global sovereign debt problems balloon and take down more nations? What if the next "Lehman" hits? Then of course we had that "mistake" by CitiCorp when they released an email to clients telling them that Citi has the right to refuse to give you your money for 7 days. Yes – CitiCorp is denying you access to your money for 7 days if they "warrant" it as necessary. What if this is a foreshadowing of things to come? What the heck do you do about it?
We know Gold has been important for over 6000 years, and silver for longer than gold. Will the ‘market’ always exist – unfortunately it’s man-made. So for today, let's just allow our minds to wander to the dark side for an instant. If we plunge into a depression – there are many elements that will make this one even more severe than the last. Back in the 30’s, our population did not live in cities – but rather in rural areas and loose townships where you could hunt for food and grow (and can) your own. Today's society is wholly and completely at the mercy of the "system". If the local grocery store was bare, what exactly would we eat? And what about power and water? The issue here is that Europe has lived thru this poverty, destruction, death and pain – at least twice in the past 100 years – and they don’t want to see it again. So the idea of sovereign wealth funds going under is real to many Europeans.
Now what if the ‘dollars’ we carry in our pockets became worthless because of devaluation and inflation, you would need ‘real money’ to swap for food and goods. Through out history there have been very few elements that have seamlessly acted as money: diamonds, gold and silver. Gold ‘in the past 10 years’ may have priced itself out of the ‘exchange-money’ arena – for example: if the dollar devalues – the Fed has done all it can – and we’re not in a mess. Gold has gone to $4,000 per ounce. What if you want to purchase milk, bread, and meat. Would you cut an once of gold in tenths – or hundredths – not likely. So you may want to think about silver.
You can still buy "bags" of pre 1964 dimes, quarters and half dollars that are made of silver. You can still buy an ounce of silver for $18. Therefore, if we were in a ‘world of hurt’, I'd sure rather trade someone two one ounce silver rounds for some meat and potatoes, than attempt to cut one-hundredth of an ounce of gold. So for ‘ease of use’ Silver wins over Gold in a catastrophe.
The next reason I like Silver is because Silver is so darned cheap right now. I have every reason to believe that the decades of silver manipulation is slowly coming to an end, and this latest dip in silver might be the ultimate "bottom" we see for many years.
Finally, Silver is compelling because without economic implosions or depressions – Gold will indeed come down. Because other than being used as money and in jewelry, gold doesn’t have a tremendous amount of industrial uses. Silver (however) is used in everything from medical, to 3 D movie screens, to electrical components, to cell phone towers, to – the list is virtually endless. If silver was allowed to trade based on it's true worth/value versus getting stomped on via huge short positions at major institutions, silver would be higher than it is today - anyway.
If the world melts down - Silver will go higher and it will make for wonderful "money". If the world doesn't melt down – Silver will remain relatively stable if not gain in value due to demand. So from where I sit (up here in the cheap seats) Silver is a win/win situation. If you buy silver coin, I tend to think you come out of it smelling like a rose either way.
The Market:
America is one of the finest countries anyone ever stole… Bobcat Goldthwait
Because of absolutely horrid economic reports, the market struggled a lot this week. The initial jobless claims rose to 497K. New home sales hit the lowest number ever registered. Greece and half of the European Continent is awash in debt. Our treasury sales are acting bizarre – for example: on Wednesday, $30+ Billion went into Treasuries that have virtually no return – a return of 0.005%. So, for a month, there are a whole lot of people more interested in just getting their money back, than making anything on it. Isn't that odd?
What happens now? Well next Friday is the all important "jobs" report. The first Friday of the month brings the non-farm payroll report and allows us to find direction in this economy. If that report is poor, the chances of a move higher are slim, but if the the report has been ‘doctored’, we could finally get the last leg of our bounce and possibly threaten the recent highs.
Monday is the first trading day of the new month, and new months usually bring in new money - therefore, you can almost buy into the idea that we'll have an up day on Monday and possibly into Tuesday. Wednesday could bring us some slack as they await Friday's report. I personally will be "leaning long" for the front part of the week, then lightening up for the second part.
TIPS:
If you ever see me getting beaten by the police, put down the video camera and come help me… Bobcat Goldthwait
CLNE - A few weeks back we mentioned CLNE if it got over 18 would be interesting. Then Cramer came on TV and hyped it, sending it over 18.00. I didn't buy since Cramer hype's tend to roll over after the shorts pound his picks. But it's holding up and now I'd probably take it at 18.30
RIMM - has that huge gap to fill if it gets over 72.00. I'd probably take that.
APWR - is trying to build a base under 14.00 and a move over, could let it romp for a few days.
CLF - has been amazingly strong now during this wicked market, and if it takes out 56.00 I'd have to move.
C - CitiBank over 3.50 would be interesting. To quote a trader – “they won't let it go out of business, so what's the downside?" Great point.
Remember the Blog http://rfcfinancialnews.blogspot.com/
Until next week – be safe.
R.F. Culbertson
rfc@getabby.com
http://rfcfinancialnews.blogspot.com
Our Thoughts:
I lost my job. No, I didn't really lose my job. I know where my job is. It's just, when I go there, there's this new guy doing it … Bobcat Goldthwait
Let's Just Suppose...
Indulge me here for a moment. What if: What if the global sovereign debt problems balloon and take down more nations? What if the next "Lehman" hits? Then of course we had that "mistake" by CitiCorp when they released an email to clients telling them that Citi has the right to refuse to give you your money for 7 days. Yes – CitiCorp is denying you access to your money for 7 days if they "warrant" it as necessary. What if this is a foreshadowing of things to come? What the heck do you do about it?
We know Gold has been important for over 6000 years, and silver for longer than gold. Will the ‘market’ always exist – unfortunately it’s man-made. So for today, let's just allow our minds to wander to the dark side for an instant. If we plunge into a depression – there are many elements that will make this one even more severe than the last. Back in the 30’s, our population did not live in cities – but rather in rural areas and loose townships where you could hunt for food and grow (and can) your own. Today's society is wholly and completely at the mercy of the "system". If the local grocery store was bare, what exactly would we eat? And what about power and water? The issue here is that Europe has lived thru this poverty, destruction, death and pain – at least twice in the past 100 years – and they don’t want to see it again. So the idea of sovereign wealth funds going under is real to many Europeans.
Now what if the ‘dollars’ we carry in our pockets became worthless because of devaluation and inflation, you would need ‘real money’ to swap for food and goods. Through out history there have been very few elements that have seamlessly acted as money: diamonds, gold and silver. Gold ‘in the past 10 years’ may have priced itself out of the ‘exchange-money’ arena – for example: if the dollar devalues – the Fed has done all it can – and we’re not in a mess. Gold has gone to $4,000 per ounce. What if you want to purchase milk, bread, and meat. Would you cut an once of gold in tenths – or hundredths – not likely. So you may want to think about silver.
You can still buy "bags" of pre 1964 dimes, quarters and half dollars that are made of silver. You can still buy an ounce of silver for $18. Therefore, if we were in a ‘world of hurt’, I'd sure rather trade someone two one ounce silver rounds for some meat and potatoes, than attempt to cut one-hundredth of an ounce of gold. So for ‘ease of use’ Silver wins over Gold in a catastrophe.
The next reason I like Silver is because Silver is so darned cheap right now. I have every reason to believe that the decades of silver manipulation is slowly coming to an end, and this latest dip in silver might be the ultimate "bottom" we see for many years.
Finally, Silver is compelling because without economic implosions or depressions – Gold will indeed come down. Because other than being used as money and in jewelry, gold doesn’t have a tremendous amount of industrial uses. Silver (however) is used in everything from medical, to 3 D movie screens, to electrical components, to cell phone towers, to – the list is virtually endless. If silver was allowed to trade based on it's true worth/value versus getting stomped on via huge short positions at major institutions, silver would be higher than it is today - anyway.
If the world melts down - Silver will go higher and it will make for wonderful "money". If the world doesn't melt down – Silver will remain relatively stable if not gain in value due to demand. So from where I sit (up here in the cheap seats) Silver is a win/win situation. If you buy silver coin, I tend to think you come out of it smelling like a rose either way.
The Market:
America is one of the finest countries anyone ever stole… Bobcat Goldthwait
Because of absolutely horrid economic reports, the market struggled a lot this week. The initial jobless claims rose to 497K. New home sales hit the lowest number ever registered. Greece and half of the European Continent is awash in debt. Our treasury sales are acting bizarre – for example: on Wednesday, $30+ Billion went into Treasuries that have virtually no return – a return of 0.005%. So, for a month, there are a whole lot of people more interested in just getting their money back, than making anything on it. Isn't that odd?
What happens now? Well next Friday is the all important "jobs" report. The first Friday of the month brings the non-farm payroll report and allows us to find direction in this economy. If that report is poor, the chances of a move higher are slim, but if the the report has been ‘doctored’, we could finally get the last leg of our bounce and possibly threaten the recent highs.
Monday is the first trading day of the new month, and new months usually bring in new money - therefore, you can almost buy into the idea that we'll have an up day on Monday and possibly into Tuesday. Wednesday could bring us some slack as they await Friday's report. I personally will be "leaning long" for the front part of the week, then lightening up for the second part.
TIPS:
If you ever see me getting beaten by the police, put down the video camera and come help me… Bobcat Goldthwait
CLNE - A few weeks back we mentioned CLNE if it got over 18 would be interesting. Then Cramer came on TV and hyped it, sending it over 18.00. I didn't buy since Cramer hype's tend to roll over after the shorts pound his picks. But it's holding up and now I'd probably take it at 18.30
RIMM - has that huge gap to fill if it gets over 72.00. I'd probably take that.
APWR - is trying to build a base under 14.00 and a move over, could let it romp for a few days.
CLF - has been amazingly strong now during this wicked market, and if it takes out 56.00 I'd have to move.
C - CitiBank over 3.50 would be interesting. To quote a trader – “they won't let it go out of business, so what's the downside?" Great point.
Remember the Blog http://rfcfinancialnews.blogspot.com/
Until next week – be safe.
R.F. Culbertson
rfc@getabby.com
http://rfcfinancialnews.blogspot.com
Saturday, February 20, 2010
This week in Barrons - 2-21-10
This Week in Barrons – 2-21-10:
Our Thoughts:
A girl phoned me the other day and said: “Come on over, there's nobody home.” I went over – and there was Nobody home. … Rodney Dangerfield
Conspiracy Theory: It didn't take long to realize that the true ‘global warming’ agenda – and that was to tax people and have more control over lives. He who rules the energy, rules the people. Now that the entire scam has been exposed, from the leaked emails where the scientists hid data and "made up" theories, to scientists saying we haven't warmed at all since 1995 and are probably cooling, to high profile global warming advocates quitting in disgrace.
I haven’t spoken to my wife in years. I didn't want to interrupt her. … Rodney Dangerfield
Last week in a fifteen minute time we had:
- the Head of the Greek Debt Office replaced by a former Goldman Sachs employee. That makes 18 x-Goldman people placed in government positions of authority around the world.
- a Pfizer – Merck researcher admits to faking dozens of research studies for over 13 years.
- a School give laptops to kids – and spies on them via webcam – an invasion of privacy like no other.
- the UN Climate Chief Yvo De Boer resigns
- the world’s biggest coal company brings U.S. government to court for climate fraud,
- 1.8M homes are about to flood the foreclosure market – that banks have been hiding in shadow inventory – this should really hit housing prices
- and on CNBC – Larry Levin – announced that “the market isn’t free, but controlled by government interventions.”
I told my dentist my teeth are going yellow - He told me to wear a brown tie. … Rodney Dangerfield
And what about the famed Trilateral Commission – “which is international and is intended to be the vehicle for multinational consolidation of the commercial and banking interests by seizing control of governments." Who is on this commission you ask? Larry Summers (former Secretary of the treasury), Timothy Geithner ( Current Treasury Secretary, was head of the NY Federal Reserve), Maurice R. Greenberg, (Chairman, CEO, American International Group (AIG) - who we bailed out and they funneled at least $13B back to Goldman), and Robert D. Hormats, (Vice Chairman, Goldman Sachs International). These are the guys that really pull the strings. So when you ask yourself "How could the bankers wreck the system and then get tens of billions in bonuses a year later?" Just look at the roster – it makes it all so very simple to understand. Your only other choice is to think that all this was on giant mistake, every fail safe failed, a monumental amount of good intentions simply "goofed up" and it was all by chance.
Now onto the market:
I remember the time I was kidnapped and they sent a piece of my finger to my father. He said he wanted more proof. … Rodney Dangerfield
A very interesting week, eh? Gold was beginning to look pretty good. Gold had put in a correction and was just starting to make some gains that looked impressive. And just as it was starting to move, the IMG decided that it was going to sell 191 tons of Gold. Isn’t it odd how they didn't announce the sale until Gold had stopped falling and was starting to march higher? And what about those gigantic short positions held by three major institutions – do you think that announcement helped them out? And when that news really didn’t have the desired effect - out of nowhere Bernanke comes out on a Thursday night and says he's going to up the discount rate from fifty to seventy five basis points. That "should" have the effect of strengthening the dollar and knocking gold for a loop. Is this really a coincidence? Well interestingly gold shook off the IMF and the Bernanke rate hike and ended Friday UP $9.
I came from a real tough neighborhood. I put my hand in some cement and felt another hand. … Rodney Dangerfield
Now, when the Fed boosted the discount rate by 25 basis points (a quarter percent) – what does that mean? First, the Fed has been draining liquidity from the system for a while now. They know the pressure is on them from every angle as their own balance sheet has ballooned to unimaginable proportions, and people are giving them a ton of flack over the bailouts and bonuses – so they are trying to make it look like they are reigning in the system a bit. So, is this the first step towards a true hike in interest rates - technically yes, but practically NO. This move will only affect about $30B in funds, and the Fed knows quite well that there is NO WAY they can hike the true money policy rates – which would effectively erase any and all benefits they may see from the stimulus. This was symbolic in nature, a way to strengthen the dollar a bit after China actually SOLD treasuries last month and frightened the heck out of them. The Fed HAD to do something to try and show the world that they are still in charge and they have some sort of credibility.
I told my wife the truth. I told her I was seeing a psychiatrist. Then she told me the truth: that she was seeing a psychiatrist, two plumbers, and a bartender. … Rodney Dangerfield
Maybe we got lucky on Friday, but sure enough after a couple dips in the am, we came back to level and ended the day "flat" with the DOW up 9 points. Okay, so where do we go from here? It's our guess that we are in a bounce period and it could take us to the 10,600 level. Our feeling is that this bounce has a bit more legs and you should milk it for what you can get.
TIPS:
I have:
DIA’s at 100.66 hard stop at 103.4
CSCO at 24.03 hard stop at entry point
CTXS at 44.04 hard stop at 44.44
Now the question is, is the market going to continue to move higher next week, or roll back over? I think it goes higher and if it does, there's a few things we might want to look at.
Think about JOYG on a move over 50.50.
Watch CLNE – a move over 18 could take me in.
Watch QCOM - over 40.00 should be worth a few dollars.
Look at C – a move over 3.50 is a low risk play.
Until next week – be safe.
R.F. Culbertson
rfc@getabby.com
Our Thoughts:
A girl phoned me the other day and said: “Come on over, there's nobody home.” I went over – and there was Nobody home. … Rodney Dangerfield
Conspiracy Theory: It didn't take long to realize that the true ‘global warming’ agenda – and that was to tax people and have more control over lives. He who rules the energy, rules the people. Now that the entire scam has been exposed, from the leaked emails where the scientists hid data and "made up" theories, to scientists saying we haven't warmed at all since 1995 and are probably cooling, to high profile global warming advocates quitting in disgrace.
I haven’t spoken to my wife in years. I didn't want to interrupt her. … Rodney Dangerfield
Last week in a fifteen minute time we had:
- the Head of the Greek Debt Office replaced by a former Goldman Sachs employee. That makes 18 x-Goldman people placed in government positions of authority around the world.
- a Pfizer – Merck researcher admits to faking dozens of research studies for over 13 years.
- a School give laptops to kids – and spies on them via webcam – an invasion of privacy like no other.
- the UN Climate Chief Yvo De Boer resigns
- the world’s biggest coal company brings U.S. government to court for climate fraud,
- 1.8M homes are about to flood the foreclosure market – that banks have been hiding in shadow inventory – this should really hit housing prices
- and on CNBC – Larry Levin – announced that “the market isn’t free, but controlled by government interventions.”
I told my dentist my teeth are going yellow - He told me to wear a brown tie. … Rodney Dangerfield
And what about the famed Trilateral Commission – “which is international and is intended to be the vehicle for multinational consolidation of the commercial and banking interests by seizing control of governments." Who is on this commission you ask? Larry Summers (former Secretary of the treasury), Timothy Geithner ( Current Treasury Secretary, was head of the NY Federal Reserve), Maurice R. Greenberg, (Chairman, CEO, American International Group (AIG) - who we bailed out and they funneled at least $13B back to Goldman), and Robert D. Hormats, (Vice Chairman, Goldman Sachs International). These are the guys that really pull the strings. So when you ask yourself "How could the bankers wreck the system and then get tens of billions in bonuses a year later?" Just look at the roster – it makes it all so very simple to understand. Your only other choice is to think that all this was on giant mistake, every fail safe failed, a monumental amount of good intentions simply "goofed up" and it was all by chance.
Now onto the market:
I remember the time I was kidnapped and they sent a piece of my finger to my father. He said he wanted more proof. … Rodney Dangerfield
A very interesting week, eh? Gold was beginning to look pretty good. Gold had put in a correction and was just starting to make some gains that looked impressive. And just as it was starting to move, the IMG decided that it was going to sell 191 tons of Gold. Isn’t it odd how they didn't announce the sale until Gold had stopped falling and was starting to march higher? And what about those gigantic short positions held by three major institutions – do you think that announcement helped them out? And when that news really didn’t have the desired effect - out of nowhere Bernanke comes out on a Thursday night and says he's going to up the discount rate from fifty to seventy five basis points. That "should" have the effect of strengthening the dollar and knocking gold for a loop. Is this really a coincidence? Well interestingly gold shook off the IMF and the Bernanke rate hike and ended Friday UP $9.
I came from a real tough neighborhood. I put my hand in some cement and felt another hand. … Rodney Dangerfield
Now, when the Fed boosted the discount rate by 25 basis points (a quarter percent) – what does that mean? First, the Fed has been draining liquidity from the system for a while now. They know the pressure is on them from every angle as their own balance sheet has ballooned to unimaginable proportions, and people are giving them a ton of flack over the bailouts and bonuses – so they are trying to make it look like they are reigning in the system a bit. So, is this the first step towards a true hike in interest rates - technically yes, but practically NO. This move will only affect about $30B in funds, and the Fed knows quite well that there is NO WAY they can hike the true money policy rates – which would effectively erase any and all benefits they may see from the stimulus. This was symbolic in nature, a way to strengthen the dollar a bit after China actually SOLD treasuries last month and frightened the heck out of them. The Fed HAD to do something to try and show the world that they are still in charge and they have some sort of credibility.
I told my wife the truth. I told her I was seeing a psychiatrist. Then she told me the truth: that she was seeing a psychiatrist, two plumbers, and a bartender. … Rodney Dangerfield
Maybe we got lucky on Friday, but sure enough after a couple dips in the am, we came back to level and ended the day "flat" with the DOW up 9 points. Okay, so where do we go from here? It's our guess that we are in a bounce period and it could take us to the 10,600 level. Our feeling is that this bounce has a bit more legs and you should milk it for what you can get.
TIPS:
I have:
DIA’s at 100.66 hard stop at 103.4
CSCO at 24.03 hard stop at entry point
CTXS at 44.04 hard stop at 44.44
Now the question is, is the market going to continue to move higher next week, or roll back over? I think it goes higher and if it does, there's a few things we might want to look at.
Think about JOYG on a move over 50.50.
Watch CLNE – a move over 18 could take me in.
Watch QCOM - over 40.00 should be worth a few dollars.
Look at C – a move over 3.50 is a low risk play.
Until next week – be safe.
R.F. Culbertson
rfc@getabby.com
Sunday, February 14, 2010
This week in Barrons - 02-14-10
This Week in Barrons – 2-14-10:
Our Thoughts:
“Babies don't need a vacation. When I see them at the beach I go over to them and say: 'What are you doing here? You haven't worked a day in your life!' … Steven Wright
For the longest time no one cared about gold and I couldn’t get anyone to even consider investing in it. Now, all I’m hearing is: "it's too high, it's going to come down". Gold is not a stock to be traded and flipped. You buy gold for one reason: It’s money! If you took $1,000 in the year 2000 and put it in your mattress – it would purchase about $750 worth of stuff today. If you took $1,000 in gold and put it into your mattress in 2000, it would purchase about $2,333 worth of stuff today. Gold preserves buying power. Now, you do have the issue of ‘last man in’. In fact, there are some very powerful people that want gold down under $1,000. First, the bankers that have gigantic short positions would love nothing more than to be able to get out of some of those on the winning side. But you also have an entire world (China, India, and Russia) that understands that gold is money, not a trading vehicle, and they want to buy it. They would rather buy gold at $900 than at $1,200. Gold carries no debt, no derivatives, no mark to model, you can't print it, or push a button and instantly "have some".
And as currencies of Greece, Spain, Italy, Ireland, Portugal, Dubai, and others are imploding daily, gold will be seen as the ultimate money at some point – but patience needs to be on your side on this trade.
I had a friend who was a clown. When he died, all his friends went to the funeral in one car. … Steven Wright
- Corporate bankruptcy filings rose 7% last month, with an average of 342 businesses filing for bankruptcy every day in January.
- Pressure is continuing to increase on wealthy borrowers, with serious delinquencies for prime jumbo mortgages rising to 9.6% from 9.2%, a 32nd straight monthly increase.
- Defaults on FHA-backed loans passed 9% in December, ending the year at 9.12%, up from 6.82% a year earlier and 8.94% in November
With the Fed suggesting they're going to stop buying bad mortgages in March, with the Commercial Real Estate market set to experience resets in the fall and into 2011, with jumbo loans imploding, with millions of foreclosed homes sitting idle – what happened to the loan ‘rework’ program?
Do you think that when they asked George Washington for ID that he just whipped out a quarter? … Steven Wright
Now think about this for a minute – (a) it’s not good for a bank to rework a loan from $300k to $200k – they immediately lose a lot of money in interest income and princpal – just to keep someone in their home. But how is it that "some" banks are making a fortune keeping the foreclosure house. One that is making a lot of noise recently is the Indymac Bank story. In July of 2008, Indymac was closed, and the assets were sold to One West Bank – that is owned by a Goldman Sachs VP along with George Soros. What you find is that if a bank “re-works” a loan – they will definitely lose money – but if they do NOT ‘re-work’ the loan - they stand to make a fortune as the FDIC is forced to ‘pay up’ and who pays – you and I end up paying to help the FDIC remain solvent (this video will tell you the entire story). http://www.thinkbigworksmall.com/mypage/player/tbws/23088/1459958
I drive way too fast to worry about cholesterol. … Steven Wright
The government is thinking quite seriously about "borrowing" our savings, and using them to create massive work projects and infrastructure improvements. In its basic form, we (the U.S.) have begun to save rather than spend. Over the past two years the savings rate has risen dramatically. Well, in a consumption society, if people are saving instead of spending, then you start to see a deflationary spiral. Ben Bernanke’s approach has been to cut interest rates to "zero" while at the same time, injecting monetary stimulus. Uncle Sam now looks at all the money sitting in 401K's, pension and savings plans, and is thinking of a way to ‘use’ that money. Right now the Treasury needs money, so the Federal Reserve "prints money", buys T-Bills, and WE have to pay the Fed back with interest. Currently the Chinese and the rest of the world are buying our debt – but what if – Uncle Sam DEMANDS that the 7,000 banks and institutions, loan the US the Trillions of dollars in savings accounts and money markets to buy our debt. We keep the money in our country – and WE (the people) suddenly own our own National Debt? Be very careful here as you are going to hear about a new "retirement" option, or a mandate to the banks that they have to lend Uncle Sam their reserves. As we speak the Money Market industry has been in talks with the Fed, about how to set up this game. With over $3.2 Trillion sitting in money market funds, and fund managers finding little in the way of "good investments", they actually like the idea of a guaranteed Fed payback. And Uncle Sam plans on spending your ‘savings’ to invest in stimulus – work programs – anything to keep GDP rising. And YES – this WILL put us even DEEPER in debt than we currently are – but elections are coming.
Which begs the question – can we spend our way out of a recession without creating either a depression or terrible inflation – the answer is NO. I think the U.S. will continue to borrow and spend ever-increasing amounts just to keep the GDP from rolling negative. There will be no slowdown in fiscal insanity, and our debts are going to continue to pile up until there is a coordinated global implosion - devaluation. All the debt bubbles from Greece to Ireland, from Spain to the UK, from Dubai to the U.S. are just floating around looking for a pin. It's my guess they'll find one. Stay long precious metals.
The Market:
I live on a one-way street that's also a dead end. I'm not sure how I got there. … Steven Wright
The wicked chop continues. The DOW and the S&P haven't been able to put in back to back "up" days since Feb 2nd. We get 150 points up, followed by 100 points down, or 65 up followed by 140 points down. Taking positions is akin to suicide. When the market enters a period of wicked chop like this, it "usually" signals a change is coming. Well, given the market ran UP from March of last year thru January of this year, then the most logical "change" would be one of a FALLING market instead of a RISING one. Except for the manufactured counter trend rallies, I feel that the path of least resistance is going to be "down". Yet the fact is, the PPT (plunge patrol team) is going to throw the kitchen sink at this market – in order to preserve the 2010 elections. There’s a lot of talk out there suggesting that more stimulus money is coming to market, earnings are going to soar, and yes the markets will rise. My guess is - the stimulus will keep the market moving sideways, not up. Frankly we've been looking for a mindless 300 to 500 point romp to sell shorts into, but so far we haven't seen one. If we get the romp, we'll ride it long, and then start shorting and buying puts. If we have one more leg down before a good bounce, we'll short that lightly, and then flip to long for the bounce. It's a traders market right now, and that's all we can do.
TIPS:
I saw a bank that said "24 Hour Banking," but I don't have that much time. … Steven Wright
We’ve sold out of everything – and are on the way toward finishing selling our 401k’s as well. The market has been a choppy mess for weeks, and I would honestly just sit on your hands and do nothing – seems to be the smartest strategy as of late. But if you must trade:
I would short the DIA under 99.00
I would short the SPY under 106.00.
Now if they get their act in gear will I go long? No. I would play the bounce be ready to short the romp higher.
Until next week – be safe.
R.F. Culbertson
rfc@getabby.com
http://rfcfinancialnews.blogspot.com
Our Thoughts:
“Babies don't need a vacation. When I see them at the beach I go over to them and say: 'What are you doing here? You haven't worked a day in your life!' … Steven Wright
For the longest time no one cared about gold and I couldn’t get anyone to even consider investing in it. Now, all I’m hearing is: "it's too high, it's going to come down". Gold is not a stock to be traded and flipped. You buy gold for one reason: It’s money! If you took $1,000 in the year 2000 and put it in your mattress – it would purchase about $750 worth of stuff today. If you took $1,000 in gold and put it into your mattress in 2000, it would purchase about $2,333 worth of stuff today. Gold preserves buying power. Now, you do have the issue of ‘last man in’. In fact, there are some very powerful people that want gold down under $1,000. First, the bankers that have gigantic short positions would love nothing more than to be able to get out of some of those on the winning side. But you also have an entire world (China, India, and Russia) that understands that gold is money, not a trading vehicle, and they want to buy it. They would rather buy gold at $900 than at $1,200. Gold carries no debt, no derivatives, no mark to model, you can't print it, or push a button and instantly "have some".
And as currencies of Greece, Spain, Italy, Ireland, Portugal, Dubai, and others are imploding daily, gold will be seen as the ultimate money at some point – but patience needs to be on your side on this trade.
I had a friend who was a clown. When he died, all his friends went to the funeral in one car. … Steven Wright
- Corporate bankruptcy filings rose 7% last month, with an average of 342 businesses filing for bankruptcy every day in January.
- Pressure is continuing to increase on wealthy borrowers, with serious delinquencies for prime jumbo mortgages rising to 9.6% from 9.2%, a 32nd straight monthly increase.
- Defaults on FHA-backed loans passed 9% in December, ending the year at 9.12%, up from 6.82% a year earlier and 8.94% in November
With the Fed suggesting they're going to stop buying bad mortgages in March, with the Commercial Real Estate market set to experience resets in the fall and into 2011, with jumbo loans imploding, with millions of foreclosed homes sitting idle – what happened to the loan ‘rework’ program?
Do you think that when they asked George Washington for ID that he just whipped out a quarter? … Steven Wright
Now think about this for a minute – (a) it’s not good for a bank to rework a loan from $300k to $200k – they immediately lose a lot of money in interest income and princpal – just to keep someone in their home. But how is it that "some" banks are making a fortune keeping the foreclosure house. One that is making a lot of noise recently is the Indymac Bank story. In July of 2008, Indymac was closed, and the assets were sold to One West Bank – that is owned by a Goldman Sachs VP along with George Soros. What you find is that if a bank “re-works” a loan – they will definitely lose money – but if they do NOT ‘re-work’ the loan - they stand to make a fortune as the FDIC is forced to ‘pay up’ and who pays – you and I end up paying to help the FDIC remain solvent (this video will tell you the entire story). http://www.thinkbigworksmall.com/mypage/player/tbws/23088/1459958
I drive way too fast to worry about cholesterol. … Steven Wright
The government is thinking quite seriously about "borrowing" our savings, and using them to create massive work projects and infrastructure improvements. In its basic form, we (the U.S.) have begun to save rather than spend. Over the past two years the savings rate has risen dramatically. Well, in a consumption society, if people are saving instead of spending, then you start to see a deflationary spiral. Ben Bernanke’s approach has been to cut interest rates to "zero" while at the same time, injecting monetary stimulus. Uncle Sam now looks at all the money sitting in 401K's, pension and savings plans, and is thinking of a way to ‘use’ that money. Right now the Treasury needs money, so the Federal Reserve "prints money", buys T-Bills, and WE have to pay the Fed back with interest. Currently the Chinese and the rest of the world are buying our debt – but what if – Uncle Sam DEMANDS that the 7,000 banks and institutions, loan the US the Trillions of dollars in savings accounts and money markets to buy our debt. We keep the money in our country – and WE (the people) suddenly own our own National Debt? Be very careful here as you are going to hear about a new "retirement" option, or a mandate to the banks that they have to lend Uncle Sam their reserves. As we speak the Money Market industry has been in talks with the Fed, about how to set up this game. With over $3.2 Trillion sitting in money market funds, and fund managers finding little in the way of "good investments", they actually like the idea of a guaranteed Fed payback. And Uncle Sam plans on spending your ‘savings’ to invest in stimulus – work programs – anything to keep GDP rising. And YES – this WILL put us even DEEPER in debt than we currently are – but elections are coming.
Which begs the question – can we spend our way out of a recession without creating either a depression or terrible inflation – the answer is NO. I think the U.S. will continue to borrow and spend ever-increasing amounts just to keep the GDP from rolling negative. There will be no slowdown in fiscal insanity, and our debts are going to continue to pile up until there is a coordinated global implosion - devaluation. All the debt bubbles from Greece to Ireland, from Spain to the UK, from Dubai to the U.S. are just floating around looking for a pin. It's my guess they'll find one. Stay long precious metals.
The Market:
I live on a one-way street that's also a dead end. I'm not sure how I got there. … Steven Wright
The wicked chop continues. The DOW and the S&P haven't been able to put in back to back "up" days since Feb 2nd. We get 150 points up, followed by 100 points down, or 65 up followed by 140 points down. Taking positions is akin to suicide. When the market enters a period of wicked chop like this, it "usually" signals a change is coming. Well, given the market ran UP from March of last year thru January of this year, then the most logical "change" would be one of a FALLING market instead of a RISING one. Except for the manufactured counter trend rallies, I feel that the path of least resistance is going to be "down". Yet the fact is, the PPT (plunge patrol team) is going to throw the kitchen sink at this market – in order to preserve the 2010 elections. There’s a lot of talk out there suggesting that more stimulus money is coming to market, earnings are going to soar, and yes the markets will rise. My guess is - the stimulus will keep the market moving sideways, not up. Frankly we've been looking for a mindless 300 to 500 point romp to sell shorts into, but so far we haven't seen one. If we get the romp, we'll ride it long, and then start shorting and buying puts. If we have one more leg down before a good bounce, we'll short that lightly, and then flip to long for the bounce. It's a traders market right now, and that's all we can do.
TIPS:
I saw a bank that said "24 Hour Banking," but I don't have that much time. … Steven Wright
We’ve sold out of everything – and are on the way toward finishing selling our 401k’s as well. The market has been a choppy mess for weeks, and I would honestly just sit on your hands and do nothing – seems to be the smartest strategy as of late. But if you must trade:
I would short the DIA under 99.00
I would short the SPY under 106.00.
Now if they get their act in gear will I go long? No. I would play the bounce be ready to short the romp higher.
Until next week – be safe.
R.F. Culbertson
rfc@getabby.com
http://rfcfinancialnews.blogspot.com
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